Agenda item

To receive an overview of the Cheshire East Council final outturn for the financial year 2024/25.

The committee considered a report which provided an overview of the Cheshire East Council final outturn for the financial year 2024/25, from Nikki Wood-Hill, Lead Finance Business Partner.

The Committee were updated that there had been an improvement in the finances, with the Adults and Health Committee having a smaller pressure of £17.6 million; it was highlighted that external care costs continued to be the main driver for the pressure. It was noted that the recommendation for Council is that the full level of exception financial support was to be utilised to support the transformation plan and add to the council’s reserves.

Members were updated that in 24/25 the Adults, Health and Integration directorate had not recognised the full year impact of the pressures from 23/24, as these had occurred towards the end of the year, as the council was going through close down process. The bulk of overspend from 24/25 related to the full year effect of 23/24, plus some one off expenditure funding from 23/24 which was not recurrent in  24/25. As a result, in 24/25 the council tracked expenditure closely, and at the end of quarter 3, when approving the 25/26 budget, a “most likely case” scenario was factored in. It was noted that the report stated that during the last three months of 24/25, activity dipped unexpectedly, so for 25/26 the council have recognised all of the recurrent costs from 24/25. In addition, the council had set aside funding for pay inflation in commissioned care costs to a level which it has not done previously.

Members were updated that, at this moment in time, there was no obvious reason as to why there should be an overspend in 25/26; the transformation plan for Adults Social Care was explicitly intended to address the key drivers of the overspend over the last 2-3 years. 

It was noted that the first year of the transformation programme would look at how Cheshire East Council could get better control of care packages for working age adults to reduce the costs, and would be looking into the models of care and associated pricing models to identify how the council could better support people with the budgets available in order to reduce costs. In year 2 of transformation plan the council would look to remodel care and housing to deliver it in a more efficient way. Cheshire East Council were comfortable that plans were in place to ensure that that over the next two years the Adults Social Care budget reflects levels that which could be reasonably expected, given the nature of the aging population within the borough.

However, it was noted that there were items over which the council did not have control, such as the budgetary pressures facing the NHS, and it was possible that the council would see the NHS asking local authorities to pick up costs which the council is no responsible for.

Members were updated that Cheshire East Council would not purchase care packages from providers where the quality of care was not appropriate and had developed a set of quality assurance ratings which it used to review care quality; this was done on a routine basis. It was noted that the council only worked with providers which it viewed delivered a quality of care which was acceptable; where the council were worried about quality, it took active steps to support providers.

Members requested details of the Earmarked Reserves. Officers committed to sharing the minutes of the Corporate Policy Committee which took place on the 12 June 2025 concerning the Earmarked Reserves, so that members could see the discussion and the proposed amendments to the recs which took place there.  The details were contained within the Corporate Policy Minutes available here on page 2.

It was noted that there was no capital programme for the Adults and Health Committee at present, and there was a requirement that the Public Health Reserve be kept separate.

Members thanked officers for their work to date in reducing the overspend for the Adults and Health Committee.

It was noted that that recommendation four contained within the report was not associated with the Adults and Health Committee, and Members would not vote on it.

Councillor John Place joined the meeting at 1055.

RESOLVED (Unanimously):

That the Adults and Health Committee:

1. Consider the overall financial performance of the Council in the 2024/25 financial year, as contained within the report, as follows:

a) A Net Revenue Overspend of £17.6m against a revised budget of £365.8m (4.8% variance) funded by conditional Exceptional Financial Support (Capitalisation Direction) via borrowing.

b) General Reserves closing balance of £6.3m.

c) Capital Spending of £88.4m against an approved programme of £215.8m (59% variance).

2. Consider the contents of Annex 1.

3. Approve the new Reserves in the Reserves Section (Annex 1, Section 5, Table 1) which includes proposed movements to reserves.